Twitter Said in Talks with Possible Buyers Facebook, Google
The Wall Street Journal, which reported the negotiations, also quoted anonymous deal makers putting an estimated $8 billion to $10 billion on Twitter, a company with an estimated $45 million in annual revenues which also lost money last year due to hiring expenses and infrastructure investments.
Separately, Kara Swisher from the tech blog All Things Digital reports that the venture firm Andreessen Horowitz has invested more than $80 million in Twitter through stock purchases in private secondary markets. That comes on the heels of a $200 million round of funding Twitter raised late last year with Kleiner Perkins as the lead investor
Those kinds of numbers may sound, well, insane, to most people back on planet Earth. But it's become par for the course in a market where fast-growing Internet start-ups are again prized for their dazzling potential. Consider the following: Online-coupon provider GroupOn recently turned down Google's $6 billion buyout offer, preferring instead to go public in 2011. And Facebook, perhaps the most talked-about company in the world these days, has consistently rebuffed potential suitors, preferring instead to build its business and sell equity stakes that have put its market value at around $50 billion.
More recently, LinkedIn has filed to go public, in an offering that may put the social network's value at more than $2 billion. Last week, AOL paid $315 to buy the Huffington Post, a sum roughly equivalent to 10 times the blog's 2010 sales last year.
If you get the feeling that we've been here before, well - we have. A similar frenzy captivated tech investors during the late 1990s prior to the bursting of the Internet bubble. That's led to a flurry of introspection within Silicon Valley with people wondering whether it's again back to the future. At this point, the consensus seems to be - deep breath, please - no, it's different this time.
"Are these prices justifiable based on financial multiples? No," venture capitalist Ethan Kurzweil of capital firm Bessemer Venture Partner told the Journal. "But these start-ups are building social services and have lots of data about their users and "the market is valuing that mightily right now."
Perhaps that indeed is the case. By this time next year, we'll likely have the answer.
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